PUBLISHED APRIL 16, 2021
Stress-free Financial Close
with a software that ACTUALLY
supports your work
By Steen Christensen
Business Analytics Strategist, B-eye Solutions
Can you recognize these situations in your organization?
Around beginning December, a spreadsheet is circulated in the Finance team. The spreadsheet is showing closing tasks for year-end reporting with the responsible persons assigned and the deadlines of the tasks. Advanced spreadsheets show dependencies between tasks, but normally, tasks are presented in chronological order.
After circulation and updates, a new e-mail is shared with filename “Year-end task_XYZORG_Final.xlsx” and the link to the file: “F:\share\common\Group Finance\Yearend\ClosingTasks\Final”.
You are in midst of financial closing and one of the pending tasks is to finalize the Intercompany Matching. Again, Subsidiary Z is the culprit and have many unsolved balances with other subsidiaries in the Group. Your consolidation system can provide you with a PDF file of approximately 25-30 pages with IC mismatches. You print the report, and with your yellow marker, choose to focus on the differences with Subsidiary Z.
You run an IC report in your application currency (USD) and remembering that Subsidiary Z runs on local currency, you note that translation differences must be taken into consideration. You prepare a spreadsheet showing the calculation of the translation - but you couldn’t find the exchange rates used in the consolidation system, so you use the latest exchange rate from a website - then you attach the PDF file together with your spreadsheet and press "Send" in Outlook. The next day, when you open your inbox, there is an auto-reply from Subsidiary Z stating that the controller is only back next Monday.
You are analyzing the sale per region and per customer segment and find out that Customer Segment “Other” shows an increase of 550% compared to last year. You run your consolidation report and can see that the company reporting on Customer Segment “Other” is subsidiary B. You must find out what that is and call subsidiary B, but the controller is on vacation. You decide to walk down to the IT department where your Finance Systems Manager (responsible for the ERP system) is located. They may be able to help you by looking into subsidiary B's postings, but you are informed that subsidiary B uses another ERP system and that they report to head office by submitting an Excel file to the Finance Systems Manager who then uploads data on their behalf. You look into the Excel file, but find out that sale to Customer Segment Other is just one number with no details. Reaching a blank wall, you decide to write an e-mail to subsidiary B and expect an answer next week.
The above scenarios are constructed for this blog, but we're sure experience says that these are not far from reality.
The Struggle with Spreadsheets and Legacy Systems
For many organizations, their legacy EPM / CPM system supports financial consolidation and that's about it. When implemented 7-10 years ago, these roll-outs were major milestones and replaced a lot of Excel consolidations or even maybe attempts to consolidate within existing ERP systems.
During these years, many users gotten used to working with the consolidation system and a jungle of spreadsheets have evolved around it - and mainly, this came about to cover for lack of functionality and finance processes supported by the consolidation system.
In above example, the Financial Calendar and its activities are outside the consolidation system. Intercompany Matching is done in a communication outside the consolidation system between two people and other people cannot see the IC status. Investigating sale specs or drill down to source data is done by looking into a spreadsheet as the ERP is not integrated with the consolidation system.
Breaking the Cycle with OneStream XF
Applying the OneStream platform gives you unprecedented closing and functionality support and eliminates the requirement of external spreadsheets as the functionality is standard content in OneStream.
Task Manager is an OneStream Marketplace solution which can be configured to support the organization with closing activities for Actual, Budget, Forecast closings or any activity you perform in OneStream. Automatic update of the tasks (turns green) when done and even tasks outside OneStream (ERP closing tasks) can be configured. Responsible persons can be added and delegation of duties, task descriptions and training can be included, enabling the user to perform. All of it can be presented in familiar Gantt-Charts with real time updates when tasks are performed. The Head office, who oversees the closing, can obtain overview of reporting status for each subsidiary, and see when the task was initiated. After closing, statistical presentation of closing performance can be viewed and head office can evaluate where most time is spent.
Intercompany Matching provides the user graphical presentation of matching status, data in local currency, reporting currency and application currency in one view eliminating the need for spreadsheets and discussion of which exchange rate to use. Communication is done within OneStream where entities can see counterpart’s workflow and understand whether the counterpart is investigating issues or maybe even not yet started.
Drill down capabilities is OneStream’s main force. From anywhere in OneStream, from any cell, drill down in the dimensional hierarchies to the lowest level is done with a few clicks. Drill down to Import area (Staging) where maybe transactions have been uploaded enables the user to see which lines are adding up to the total. With some further configuration, drill back to source data can be achieved.
Organizations that are now using OneStream have sped up their financial close and reporting cycles. Having efficient processes led to improving data quality, creating more time for value-added analysis, and better decision-making.